Modes of Interorganizational Imitation: The Effects of Outcome Salience and Uncertainty

Abstract

We thank Jim Baron, Alison Davis-Blake, Werner DeBondt, Mike Hannan, Matthew Kraatz, Dan Levinthal, Craig Olson, Jeff Pfeffer, Thekla Rura, Andreas Schwab, Sidney Winter, and seminar participants at the Wharton School, Carnegie Mellon, and Stanford University for helpful comments on earlier drafts of this paper. Drawing on neoinstitutional and learning theories, we distinguish three distinct modes of selective interorganizational imitation: frequency imitation (copying very common practices), trait imitation (copying practices of other organizations with certain features), and outcome imitation (imitation based on a practice's apparent impact on others). We investigate whether these imitation modes occur independently and are affected by outcome salience and contextual uncertainty in the context of an important decision: which investment banker to use as adviser on an acquisition. Results of testing hypotheses on 539 acquisitions that occurred in 1988-1993 show that all three imitation modes occur independently, but only highly salient outcomes sustain outcome imitation. Uncertainty enhances frequency imitation, but only some trait and outcome imitation. The results highlight the possible joint operation of social and technical indicators in imitation, illuminate factors that moderatewvicarious learning processes, and show asymmetries between learning from success and failure.'